§ 755 Rules for allocation of basis

OLRC 119-134 · eCFR 2026-10-19 · 1 regs · 2 amending Acts · cited by 5 sections

Enacted 1954 · Act Aug. 16, 1954, ch. 736 Amended · 2 Acts

195419762004(a) General rule(b) Special rule(c) No allocation of basis decrease to stock of corporate partner
Connections Cited by 5 · Cites 3
§ 755 Rules for allocation of basis
§ 1.755-1 Rules for allocation of basis.Prop. § 1.755-2 Proposed 2000 · Coordination of sections 755 and 1060.Prop. § 1.755-1 Proposed 2014 · Rules for allocation of basis.Prop. § 1.755-1 Proposed 2014 · Rules for allocation of basis.

Cases: Muserlian v. Commissioner, 932 F.2d 109 (2d Cir. 1991)

Final rules 5

    (a) General rule Any increase or decrease in the adjusted basis of partnership property under section 734(b) (relating to the optional adjustment to the basis of undistributed partnership property) or section 743(b) (relating to the optional adjustment to the basis of partnership property in the case of a transfer of an interest in a partnership) shall, except as provided in subsection (b), be allocated—

    Amended 1976
    • 1976 Pub. L. 94-455 Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.
    Cited by 2

      (1) in a manner which has the effect of reducing the difference between the fair market value and the adjusted basis of partnership properties, or

      (2) in any other manner permitted by regulations prescribed by the Secretary.

      (b) Special rule In applying the allocation rules provided in subsection (a), increases or decreases in the adjusted basis of partnership property arising from a distribution of, or a transfer of an interest attributable to, property consisting of—

      Amended 1976
      • 1976 Pub. L. 94-455 Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.
      Cited by 2

        (1) capital assets and property described in section 1231(b), or

        Cited by 1

          (2) any other property of the partnership,

          Cited by 1

            shall be allocated to partnership property of a like character except that the basis of any such partnership property shall not be reduced below zero. If, in the case of a distribution, the adjustment to basis of property described in paragraph (1) or (2) is prevented by the absence of such property or by insufficient adjusted basis for such property, such adjustment shall be applied to subsequently acquired property of a like character in accordance with regulations prescribed by the Secretary.

            (c) No allocation of basis decrease to stock of corporate partner In making an allocation under subsection (a) of any decrease in the adjusted basis of partnership property under section 734(b)—

            Amended 2004

            (1) no allocation may be made to stock in a corporation (or any person related (within the meaning of sections 267(b) and 707(b)(1)) to such corporation) which is a partner in the partnership, and

            Cited by 1

              (2) any amount not allocable to stock by reason of paragraph (1) shall be allocated under subsection (a) to other partnership property.

              Cited by 1

                Gain shall be recognized to the partnership to the extent that the amount required to be allocated under paragraph (2) to other partnership property exceeds the aggregate adjusted basis of such other property immediately before the allocation required by paragraph (2).